Here’s a bargain in Seal Harbor. The price of 28 Main Street was 449,500, now just $399,500!! This property purchased in 2007 for $525,000. Truly motivated Seller. Check out the details at www.meetmike.com.

Seal Harbor Deal!

Just got my weekly update from The First NA, one of the larger commercial banks here in Bar Harbor. The 30 year fixed rate with zero points today is 5.0%, the lowest rate in a couple of months. This secondary market rate should be roughly the same at other local Maine banks. You might do a little better with a local mortgage company, as they often have access to national financing options. And you would likely do better with a national bank or mortgage company, either directly or online. With national and internet sources, however, you probably would give up the personal service and problem solving you get from local mortgage people.

Rather than drop below 5.0%, I predict that rates will start to veer up again after the Thanksgiving holiday. I you’re thinking about refinancing or purchasing, but missed the last rate downtick, now’s a good time to lock in.

Maybe it’s the warm dry weather making up for our rainy summer, but for whatever reasons MDI’s 2009 real estate market keeps chugging along. Sellers continue to drop prices and react positively to offers considerably below reduced list prices. More importantly, Buyers appear to have woken up from their 18 month slumbers to take advantage of the many opportunities for them at this stage of the market cycle.

Where are we exactly in the market cycle? At or maybe just a bit past the bottom, which is great news for Sellers, Buyers, and real estate pros. What’s the most reliable indicator of this progress? The appearance, after a long absence, of multiple offer situations. Twice in October I and my clients founds ourselves in “bidding wars.”

The two properties getting all the attention from Buyers weren’t anything spectacular: not scarce waterfront, or even scarcer view properties; not architectural gems out of HGTV. What both properties have in common are good locations, good condition and, critically, list prices that said “Fair Price!” to educated buyers and brokers. It’s this combination of location, condition, and price that invariably brings offers and sales.

Trying to sell your house? There’s nothing you can do about location, except make an allowance in your pricing. You can do something about condition: if something’s broke, for goodness sake, fix it!

And price? Lots more on pricing your house to sell in this market on my next blog entry. Stay tuned!

Just Sold for $180,000

About 60 days ago, somebody turned on the Bar Harbor real estate faucet, at first a trickle, then a gentle flow, then even more that’s making a lot of Sellers happy, and Buyers even happier!

Just like other recoveries, the buying started at the bottom of the market under $200,000. But it’s moved quickly through the $200K’s, and even the $300K range is seeing a lot of contracts and sales. (But the market for properties $400K and up is dead, which is sad since there are a lot of attractive homes).

What’s the difference between now and this time last year? First, price reductions and motivated Sellers who are tired of waiting around to get on with their lives. There’s been a dramtic shift is listing prices: homes that were listed in the $400K’s are now in the $300K’s; $300K’s in the high $200K’s, etc. The second change is that Buyers are sensing that the MDI market is at its bottom and don’t want to miss out on the best prices in this cycle.

One caveat! There have been a lot of truly “lowball” offers. To my knowledge, none of these have been accepted. That’s one of the great thing about Mainers: they’d sooner burn their house down than give it away!

Any recent experiences as a Seller or Buyer you’d like to share?

Not if your goals are income, appreciation, and minimal headaches. It’s hard being a long distance landlord. You can hire a property manager, but the cost reduces your profit. Rents in Maine, reflecting rural incomes, are low relative to urban and suburban areas. The rental income may not cover expenses and debt service.

For several years, there was a strong market for single family houses that could be converted to vacation rentals. With few exceptions, supply of vacation rentals now seriously exceeds demand.

In this market, you usually don’t have a choice. Properties are on public water and sewer or they’re not, the alternatives being private wells and septic systems. As to water, many people prefer the taste of unchlorinated well water. Properly installed and maintained septic and sewer systems are equally reliable.

Since public utilities rarely extend beyond the cores of villages and towns, the real choice is between living in “town” versus living in the country. The type of water or sewer delivery is just one of many factors to be considered.

Yes, if the parcel is larger than 5 acres. Yes, if the property is in a village where lots are small and folks have gotten casual about the exact location of lines. Yes, if you’re buying expensive shorefrontage, and double yes if you’re thinking about dividing it: there is a minimum amount of running feet on the shore required for any new lot.

No, if the property is an approved subdivision with blazed or flagged lines and clearly monumented corners.

Having said this, surveyors here are expensive and hard to get. In the absence of red flags, you may want to adjust the purchase price in lieu of the headaches of getting a survey done in your lifetime.

Yes. In this market, the maximum appreciation occurred between 2000 and 2004, so the value of your house probably doubled. But now rising interest rates are nibbling away your market value. So you must sell sooner than later to realize your maximum return. The key to selling sooner is accurate pricing. If your house doubled in value, it won’t sell if you list it at three times what you paid for it.

The major benefits are the same here as anywhere:

Shared Maintenance. Keeping up a home by yourself is hard work and expensive. Condo maintenance is typically contracted by the unit owners’ association. Each unit’s share of the cost is usually less than the cost of keeping up a traditional home.

Security. There comes a time when it’s a blessing to have neighbors at hand, even next door or across the hall.

Freedom. It’s wonderful to be able to lock the door and wander off for a month or more, knowing that your home is in good hands.

Amenities. Often condos offer benefits that individual owners might not be able to get on their own: acreage next to the national park, ocean or mountain views, heated pools, lower fuel costs, affordability, owner financing.

Yes and No.

No, if you require a big return on your investment within 3 years. Land values have leveled off after six years of appreciation: an MDI building lot worth $30,000 in 2000 is worth $120,000 today, but will probably take several years to get to $150,000. Land should appreciate at 6-8% annually.

Yes, if you can get a piece of quality saltwater frontage at a reasonable price. Plan to hold it for 7-10 years.

Yes, if you can get a chunk of acreage to subdivide within commuting distance of MDI. There is demand for off-island lots that are affordable, i.e. $35,000 to $40,000.